How Batteries Will Change the Power Business/Barron's

For years we've been reporting on the strategic growth and important of energy storage systems.  Here's a deep dive and great insight on the changing landscape of power.

STERLING, MASS.—Until recently, this tidy, quiet town in central Massachusetts was best known to outsiders for its eight-acre corn maze out by Davis Farmland, and for a little statue near the corner of Main and Park immortalizing the lamb that is said to have followed young Mary Sawyer to school one day in 1812, inspiring a well-known poem. Lately, however, Sterling welcomes visitors from far away who don’t come for outdoor fun or nursery rhymes.

“As soon as it came on-line, they started rolling in—Japan, Switzerland, Sweden, Brazil, Colombia—13 different countries so far,” says Darren Borge, operations supervisor at the town’s light department. The visitors come to peek inside a single shipping container placed in late 2016 at the power substation on Chocksett Road. There, twin rows of what look like post office boxes pack lithium-ion batteries that together can hold two megawatts of power. That’s enough to make Sterling, population 8,000, the country’s per capita energy-storage leader—and a glimpse of the future of the electricity business.

High-power batteries have already infiltrated the chain-saw aisle at Home Depot and are poised to disrupt the car industry in the decades ahead. Now, they are quickly multiplying across the U.S. power grid. In Sterling, those two megawatts are enough to provide savings and resiliency—to smooth out power demand and avoid peak charges, and in the event of an outage, run the nearby police department and fire dispatch for more than a week.

Last year, the nation installed half a gigawatt of energy storage—equal to 250 Sterlings. Over the next eight years, the country will add more than 35 gigawatts of storage, or 17,500 Sterlings, predicts the Energy Storage Association, a Washington, D.C., industry group. That’s enough to save $4 billion in yearly operating costs. Stephen Byrd, a utility analyst for Morgan Stanley, calls that storage forecast credible. He reckons the U.S. storage market will eventually be worth at least $20 billion, and $35 billion under more bullish assumptions.

That’s excellent news for many stakeholders. Consumers stand to save on power and see fewer disruptions. Towns can cut pollution and add jobs. Some utilities will enjoy lucrative growth opportunities by, for example, combining renewable power with storage, while others could be left behind, generating costly coal and nuclear power while prices fall around them. Right now, stock valuations across the utility sector aren’t especially differentiated, providing an opportunity for investors...."

MORE AT: www.barrons.com/articles/how-batteries-will-change-the-power-business-1528509035